Financial Coach Teaches Wealth-building from the Ground Up
What’s the difference between a financial advisor and a financial coach? A traditional financial advisor is someone you hire to manage the wealth you already have; such advisors often have the interests of selling products at heart. A financial coach, on the other hand, is someone focused on helping you build wealth in the first place – through education, decision-making, and smart money management across the life cycle.
The National Financial Educators Council trains financial coaches through its new Certified Financial Education Consultant (CFEC) program. Graduates of this 120-hour coursework gain capability to lead a variety of activities that move people toward financial wellness, including individual consultation, family programs, and community-wide campaigns.
Studies indicate that most people do not receive basic money management training, either at home or in school. Therefore they often resort to obtaining advice from unqualified friends or colleagues, or from financial professionals who are mostly concerned with selling products. CFECs are prepared to take on financial coach jobs where their primary goal is to help clients successfully reach their objectives. These coaches are independent, a financial coach salary does not rely on selling financial products, and most coaches are not bound by the strict regulations placed on traditional financial advisors. Rather than just giving advice in one specific area, they can take a big-picture approach to organizing your money and developing a long-term plan.
For example, your financial life coach is trained to understand people’s emotions with regard to money decisions. Once you get beyond those emotional ties, you can make decisions aligned with your personal goals. Coaches offer you the financial education and trusted guidance to make those important decisions confidently and capably. They are peer guides, rather than wealth managers.
Financial Coach or a Financial Advisor?
This brief posting will help you understand the roles of and clarify the need for a Financial Coach or a Financial Advisor.
A financial coach takes a holistic look at your finances and will make recommendations on items that include: budgeting, credit history, savings plans, estate planning, and investment planning. They also provide a personal financial education along the way. The goal of teaching you basic financial education principles is to help you understand the topics and principles so you can feel confident in your decisions. Financial coaches will often recommend a financial advisor to help those that have money to invest in the stock market.
Financial advisors are specialists in stock market investing and their primary function is to recommend investments that meet your financial goals.
So have a financial coach as a key part of your team and a financial advisor if you want to invest in the stock market. Pick up the basic financial education skills with the help of your financial coach so your confident in your financial decisions.